Episode Details

This special report examines the difficult nomination of Kevin Warsh to Chairman of the Federal Reserve and the awkward transition facing him as Jerome Powell may stay around beyond the end of his term in May. Kevin Warsh’s time at the Fed could be transformational. He would like to do away with Forward Guidance, projections, change the Fed’s main targets, get away from data drift and dependence, and most importantly reduce the Fed balance sheet. All of this is very concerning to Wall Street and Capital Hill as they are perfectly happy to leave the Fed as it is. The reality for Mr. Warsh is far more difficult. Can the Fed reduce its balance sheet without creating other problems? Reducing bank reserves, taking too much liquidity out of the REPO market, and taking the punchbowl away from Wall Steet, just to name a few. Furthermore, should Mr. Warsh focus on revamping the Fed’s personnel, spending, and data? The Fed currently has 24,000 employees, the spending at the Board level has been increasing for decades, and the data points have not been updated and/or reevaluated in a long time. These are all areas that require major attention. Beyond all of this, the Fed has a major trust issue with main street. The Fed is truly at a crossroads. Mr. Warsh, should he be nominated, has a monumental task in front of him.  This episode reviewed multiple articles from The Epoch Times, The Wall Street Journal, and CNBC.